Wednesday, October 19, 2011

Here are some of the real reasons people are Occupying Wall Street and not one of them has to do with asking for something for nothing, that right is left for the criminal bankers, corrupt politicians and anyone else involved in ruining the US Economy and wiping out the housing market along the way.

ORLANDO, Fla. — Ernest Markey lost his stone-cutting business in 2009. He then sold his home for half a million dollars less than its value at the peak of the housing bubble and moved with his wife, Marie, to a smaller home in a less affluent suburb. They gave up two new cars and bought one. Used.

The Markeys have since patched together a semblance of their old life, opening a new stone-cutting shop. But they do not expect that they will ever recover financially from the loss of equity in their old home.

“For two years I kept thinking that things would get better,” Mr. Markey, 51, said as he stood in his empty store on a recent weekday. “Now I think the future doesn’t look so good.”

The United States has a confidence problem: a nation long defined by irrational exuberance has turned gloomy about tomorrow. Consumers are holding back, businesses are suffering and the economy is barely growing.

There are good reasons for gloom — incomes have declined, many people cannot find jobs, few trust the government to make things better — but as Federal Reserve chairman, Ben S. Bernanke, noted earlier this year, those problems are not sufficient to explain the depth of the funk.

That has led a growing number of economists to argue that the collapse of housing prices, a defining feature of this downturn, is also a critical and under appreciated impediment to recovery. Americans have lost a vast amount of wealth, and they have lost faith in housing as an investment. They lack money, and they lack the confidence that they will have more money tomorrow.

Many say they believe that the bust has permanently changed their financial trajectory.

“People don’t expect their home to regain value, and that’s really led to a change in consumer attitudes about the economy that we’ve just never seen before,” said Richard Curtin, a professor of economics at the University of Michigan who directs its Survey of Consumers. The latest data from the survey, released Friday by Thomson Reuters, shows that expectations for economic growth have fallen to the lowest level since May 1980.

I have been writing about this very thing for over 3 years. It has been a vast conspiracy of the banksters, media, and the government to keep telling people that the housing crisis will all blow over if we just let the banks off the hook. This is total bullshit and the media has been feeding it down the gullet of the brainwashed lower middle class for months. The self righteous jack asses that keep condemning the OWS protests as if it is a badge of honor to be screwed by the 1%. Those against the protests are so blind to their own connection with the real world. This article points out what it is like in the real world where people are running businesses, were running businesses and employing people, or now just trying to survive because they lost everything.
I don't get it on one hand but on the other hand I do. People take pride in seeing other people failing if they had done well in the past, they are happy to say see I told you so even though in any other ear in history the risk takers have always been the leaders. So now is your chance for those who were always afraid to strike out on your own, always afraid to risk a penny in investment and always resenting those who were willing to take risks to give them your "I told you so". You can do it and get great satisfaction out of it even though the entire country is suffering due to all that you fail to see.

In Orlando, a city that trades in upbeat fantasies, the housing crash
has been particularly painful. The total value of area homes has fallen
below the total mortgage debt on those homes, according to the real
estate analytics firm CoreLogic. In the parlance of the real estate
world, Orlando is underwater, a distinction matched by Las Vegas.“I
don’t know that it’s going to get better. We just have to get used to
it,” said Sherry DeWeese, whose home in Ocoee, a northwestern suburb of
Orlando, is worth less than she paid for it 13 years ago — and about a
third of its value at the peak of the market. “It was nothing to buy
whatever we wanted. Now we just think about what we really need.”

Economists
have only recently devoted serious study to how a decline in housing
prices affects consumer spending, not least because this is the first
decline in the average price of an American home since the Great
Depression.

Yes because most people thought the government knew better than to let the Wall Street Criminals ruin the best thing going for the American Economy. There is no other way for people to build a nest egg. It was the Golden Goose for retirement and it was source of revenue for schools and local governments and it was part of the American Dream that provided security to Americans as well as a social safety net that gave people something to fall back on in case of emergency. Now people are starting to believe that it will never be a source of anything for them, of course other than a burden as they try to move for work, or to sell so they can downsize in retirement. All of you that made it to retirement with enough to live are very fortunate because thousands of people have done all the right things over the years and have gotten shafted.

A recent paper by Karl E. Case, an economics professor at Wellesley
College, and two co-authors estimated the decline in home prices from
2005 to 2009 caused consumer spending to be $240 billion lower in 2010
than it otherwise would have been. That figure is equal to about 1.7
percent of annual economic activity, enough to be the difference between
the mediocre recent growth and healthy growth. And it does not include
all the other effects of the housing crash, including the low level of
new home construction, that are also weighing on the economy.

Roy
Pugsley, who owns a pool supply store in Winter Garden, another suburb
here, said that he made 2,500 fewer sales during the first eight months
of 2011 compared with the same period in 2007. That translates to one
less person walking through the doors to buy chemicals or toys or spare
parts in each hour that the store is open.Mr. Pugsley said
business actually increased in the early days of the recession;
customers had told him they were spending more time at home. But now
people buy only what they need for maintenance. “People realized that it
wasn’t going to get any better, and they stopped spending on their
pools, too,” he said.At Milcarsky’s Appliance Center in the
adjacent town of Longwood, business now comes from people remodeling
their own homes rather than builders, and customers are picking cheaper
models, said Doug Morey, a sales manager.“People who might have
bought that” — he taps a stove with chunky burners, designed to look
like it belongs in a restaurant kitchen — “are double-thinking it.
Everyone has had to cut back.”That means Milcarsky’s has cut back
too. The company, which employed 26 people three years ago, now has
about a dozen workers, and they are making less in salary and
commissions.

“I might like to think that I’m middle class, but I’m
not. I’m not anymore,” said Rae-Anne Crotty, a customer service manager
at the store. She now shops for groceries at discount stores, she said,
and buys gifts for her children at Christmas but not on their
birthdays.It remains the prevailing view of economic policy
makers that economic activity will eventually return to the same
trajectory as before the recession. Mr. Bernanke and others have said
that they see no evidence of any permanent change in the economy.
Previous bouts of economic pessimism, as in the early 1980s and early
1990s, went away once growth picked up.But many people in the
Orlando area do not share this confidence, at least not when it comes to
their own prospects. Instead, like the Markeys, they are settling into
lives of less prosperity.The couple moved to Orlando 12 years ago
from central Massachusetts in search of opportunities. The business Mr.
Markey created, Stone Giant, grew to include two factories and 60
employees, and it installed granite countertops in up to 15 new kitchens
every day.His new company, Winter Park Granite, now installs two
kitchens on the average day. He has eight employees but cannot afford
health insurance for them or himself. The family income last year was
less than a third of the $175,000 that he and his wife made in 2007,
their last good year.And he sees little room for growth. He has stopped spending money on advertising.“We’re
never going to get that big again,” he said. “I was someone employing
people and taking people to the good life. Now I’m just trying to
survive.”

1 comment:

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